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Wednesday, 12 September 18
IS LNG POISED FOR A NEW GROWTH CYCLE? - WOOD MACKENZIE
 Gas needs to work for its long-term sustainability. But the mood music is upbeat. Just 18 months ago the LNG market was depressed, anticipating an extended period of oversupply. Things haven’t played out quite like that, and prices have staged a strong recovery.
The market may not be out of the woods yet, as supply builds up next year potentially putting some downward pressure on prices. But the outlook beyond is bullish, with 65 mmtpa of new supply needed to meet growing demand by 2025 – that’s 20 mmtpa more than we forecast a year ago.
How have things turned round so quickly?
Demand has been firmer. Low prices drew buyers into the market after Asian LNG prices fell 75% from the 2013 peak of US$17/mmbtu to US$4/mmbtu by 2016. China began a buying spree that hasn’t stopped, spurred by the Government’s initiative to improve air quality in its cities. The Paris Agreement of 2015 has hardened energy policy – European governments are accelerating a shift away from coal to the benefit of renewables as well as gas. A new and diverse breed of countries has joined the traditional LNG buyers, among them Pakistan, Bangladesh, Colombia, Jamaica and Panama. LNG has gone global in the downturn.
Europe emerges as key growth target for LNG suppliers
Delayed production startup at some new LNG projects has also diminished the feared oversupply. Future gas supply in Europe will be structurally reduced by the decline of Groningen. The Dutch field, a pillar of continental supply for over 50 years, is beset by earthquakes. Volumes will be cut to minimal levels in the early 2020s and cease in 2030. With Russian pipelines maxed out, even with modest demand growth Europe has emerged as a key growth target for LNG suppliers. The loss of Groningen alone accounts for half of the 20 mmtpa increase in our forecast 2025 supply gap.
As global LNG players gather in Barcelona for the big Gastech Conference September 17-20, things look brighter. Yet major challenges lie ahead for the industry, these three among them.
1. Bringing competitive new supply to market
Projects are jockeying for position including Mozambique Areas 1 (Anadarko) and 4 (Eni/ExxonMobil), Arctic LNG 2 (NOVATEK/Total), LNG Canada (Shell/Petronas), Qatar expansions (Qatargas) and a plethora of US sites. 2019 may be the biggest year ever for LNG project sanctions; 100 mmtpa of new capacity could reach FID in the next three years.
Project delivery and managing spend of up to US$200bn will be big tests following the difficulties of the last cycle. And with buyers unwilling to commit to long term contracts for all their needs, sellers have to take on more risk. The ‘new economics’ of LNG projects favours big, financially strong players – large resource holders, major portfolio players and, possibly, traders.
2. The inexorable rise of US supply democratising the LNG market
A fringe player a few years ago, US LNG will vie with Qatar to be the world’s biggest supplier by the mid-2020s. Cheap Permian and Marcellus gas create a competitive advantage versus many conventional projects. Some LNG contracts are already marketed as distinctly Henry Hub, influencing oil-linked LNG pricing. In time a quarter of all cargoes on the high seas will be Henry Hub-derived, FOB with no destination clauses. This will dramatically increase liquidity in LNG trading and the effect on global LNG pricing will be profound.
Gas hubs in the US and Europe have evolved over the decades to accommodate gas/oil competition and arbitrage between spark spreads and dark spreads. So too will Henry Hub be duly absorbed into the global pricing mix in European hubs and Asia. A global LNG marker price will emerge with Henry Hub a key determinant.
3. The need for sustained gas advocacy
Gas is presently winning market share from coal. But intensifying policy on energy efficiency, methane and carbon emissions, the growth of renewables, development of battery storage and new energy technologies all pose a threat. Gas cannot rest on its laurels as a bridging fuel for the energy transition. The industry needs to keep pressing the case for gas as the low carbon intensity option, and continue to build new markets by ensuring security of supply at a competitive cost.
Source: Wood Mackenzie
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Saturday, 20 October 18
PANAMAX: THE PACIFIC SAW A LARGE VOLUME OF FIXING, WITH INDONESIA AGAIN THE DRIVING FORCE - THE BALTIC BRIEFING
Capesize
A positive end to last week after a shaky start, with a Coaltrans taking participants out of the market early on and with rates slippi ...
Thursday, 18 October 18
SUPRAMAX: INDO/WC INDIA SUPRAS ARE FIXING AROUND MID $14000S P/D BASIS SPORE DELIVERY
Capesize
The volatile Cape market continues this week, especially in the Pacific says Fearnleys in its latest weekly report.
...
Thursday, 18 October 18
COAL SHORTAGE HITS POWER SECTOR AGAIN; HOW INDIA CAN GET ITS PRODUCTION RIGHT - ANIL SWARUP
By convincing states of the value proposition of increased production, the record production of Fy15 & Fy16 can be emulated.
The ...
Thursday, 18 October 18
CHINA POWER REFORM NEUTRAL ON GRIDS, PRESSURES IPP MARGINS - FITCH RATINGS
China's power sector reform has a broadly neutral impact on transmission grids although it will pressure the power producers' margins, says ...
Wednesday, 17 October 18
ESCROW SERVICE FOR BALTIC MEMBERS NOW LIVE
The Baltic Exchange’s Escrow Service for its members to hold deposits for ship sale transactions goes live today (15 October). The service is ...
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- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- The University of Queensland
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
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